Indian telcos warn of industry 'death knell'

Country's telcos denounce regulator's proposals for spectrum auction, warning that high costs--possibly as high as 100 percent of existing rates--will be passed on to customers and harm industry, report says.

India's telecom operators have openly warned that mobile call rates could go up dramatically and harm the local industry if the government decides to accept the its regulator's proposals for the spectrum auction.

The Indo Asian News Service reported Thursday that the heads of various telcos with a stake in India, including Bharti Airtel, Vodafone, Telenor and Idea Cellular, met with ministers and officials to speak out against recommendations from the Telecom Regulatory Authority of India (TRAI).

Sanjay Kapoor, Airtel CEO, was cited as saying: "The TRAI recommendations are flawed and retrograde, regressive and uncertain, which will harm consumer interest, and will ring the death knell for the Indian telecom industry." Kapoor is also chief of the Cellular Operators Association of India (COAI).

The association warned telcos' operation costs would go up, which would result in a significant spike in call rates that will be borne by customers.

"Our belief is that the implication could be as high as 100 percent of the existing rates to be compensated by the customers. This would vary circle to circle and doesn't take into account any spectrum re-farming, which would actually push prices even further," Kapoor warned.

On the proposed re-farming, he also said: "If we were to surrender the 900MHz spectrum and switch to 1800 MHz, you as customers will find dark holes inside and in streets and bylanes. The rural part of the country will seem disconnected tomorrow."

The telcos' warning echoed that made by the international telecommunications industry group GSMA, which had earlier argued that TRAI's spectrum proposals were against international best practice and would only retard India's growth.